The Real Estate Institute of Queensland (REIQ) has slammed the state government’s decision to introduce an additional surcharge to foreign investors, arguing that the new policy could not have come at a worse time.
Last week, the Queensland government announced that property transactions from foreign buyers will attract an additional 3.0 per cent surcharge.
REIQ chief executive Antonia Mercorella criticised the new policy and said it “treats the property sector like an ATM” while going against the government’s original commitment to Queensland purchasers.
“Curtis Pitt made a firm commitment to Queenslanders and the property industry in 2015 that he would not raise stamp duty or increase costs or fees for foreign buyers,” Ms Mercorella said.
“He said, ‘Queensland is open for business’, but [now] he’s slammed the door shut.
“The state government has failed to consult with industry groups on this matter and if they had, we would have told them how fragile the market is at the moment.”
Ms Mercorella said the additional 3.0 per cent surcharge on stamp duty is a significant impost for the non-concessional buyer.
“[It’s] not a small amount, it almost doubles the stamp duty,” she said.
“This is potentially disastrous news for our apartment market, where some estimates have foreign buyers at around 15 to 20 per cent across Brisbane in the new apartment market.
“The Gold Coast apartment market also relies on foreign investment levels and this could be a significantly negative impact on that market.”
Ms Mercorella noted that the new policy could not have come at a worse time, with regional Queensland struggling and the state experiencing rising vacancy rates as well as falling employment rates.
“Regional Queensland – where two-thirds of us live – needs all the investment help it can find, and by adding another tax on top of what they already rake in, the state government is further threatening the viability of the property market,” she said.
Meanwhile, the Queensland government also announced a $5,000 increase to the first home buyer’s grant for new purchases.
“We welcome the increase in the first home buyers grant from $15,000 to $20,000, but it needs to be broadened to existing establishments,” Ms Mercorella said.
“Regional Queensland does not need stimulus for new dwelling construction. It has an oversupply of housing.
“This is a poorly thought out policy flip that reflects a deep lack of understanding of what is happening outside of the south-east corner. I thought this government would fight harder for regional Queensland.”
[Related: ME cracks down on foreign borrowers]